Construction outlook: Breezy with ‘scattered signs of improvement’

We’re well aware California real estate is a mess. But If you’re wondering how the construction economy is doing in Texas, look no further than the Dallas Fed’s Beige Book.

Today’s Beige Book says, “After a ‘horrible’ fourth quarter wrought with cancellations and a lack of sales, home builders reported buyer traffic picked up in January and has been sustained in February. Low interest rates are helping pull potential buyers off the sidelines…”

Housing conditions are still weak and several small builders are expected to “exit the market.” I’m pretty sure that is Fed speak for “go out of business.”

But the good news for all Texas homeowners: The “level of inventory is low and should continue to keep price declines minimal compared with the national average.”

On the commercial side, the Dallas Fed says that uncertaintly has planted many lenders and sellers on the sidelines for now. Commercial building should decline, but leasing activity has been “OK.”